Why the LNG Export Moratorium is Wrong

Last week the Biden administration announced a temporary pause on pending decisions on export of LNG to non-FTA countries (Moratorium). This is a misguided policy step where the Administration is seemingly picking the LNG industry to be the poster child for the “existential threat of our time”.

One of the hallmarks of United States historically has been its pro-business, pro-entreprenuership, pro-innovation culture. This includes not only providing support to high-tech trendy industries, like the space industry, but also more fundamental industry – like energy, railroads and steel industries.

Recently we also have great examples of the U.S. providing significant support within sustainable and environmentally friendly industries, like we see with the Inflation Reduction Act (although the irony is not lost on me that the center of capitalism is beating Europe on subsidies and incentives).

It is therefore disappointing that this sudden policy shift undermines one of our best strategies to combat climate change – substituting international coal with U.S. LNG.

I am not saying that DoE should not review how such projects impact climate change. On the contrary – they should continously do so! What I am opposed is this artificial “break” – where everything comes to a screeching halt, because some bureaucrats need to set aside time to “study”.

DoE is a vast department, with $100 billion plus funding. Are you telling me that DoE is incapable of studying as we go? Hire consultants to help?

In fact, in 2020 they extended their prior approvals to nearly 50 projects until the end of 2050. Before reaching such a decision they had to undergo a rigirous process complying with environmental reviews and laws and regulations.

So what changed between 2020 and last week?

Certainly, our understanding of the climate crisis was not one – If you ask UN, it appears it was in the late 1980s that the world really started giving real impetus to environmental issues.

This decision serves to destabilize US’ position as a stable provider of energy security, and a reliable partner.

What we need is a robust and flexible energy system that supports an ever more complex world.

The Natural Gas Act authorizes the exportation of natural gas from the United States unless DOE determines that doing so “will not be consistent with the public interest.”

When even the EIA themselves says, “Less use of coal was the largest contribution to U.S. emissions reductions in 2022.”, there is only one conclusion: Continued export of U.S. LNG absolutely IS consistent with the public interest, and by law must be processed and approved accordingly without delay.